OUR THOUGHTS ON:

IRS Hot Topics

Tax

By Dennis Mowrey

  • The hottest topic now is that the IRS is targeting small and medium-size businesses with substantial cash flow and Sub-Chapter S filers. A just completed three-year study showed that up to 85% of businesses are noncompliant with many of the issues having to do with the requirement that Sub-Chapter S officers be on the W-2 payroll if they are active in the business.
  • Another area of concern is the issue of loans to and from partners in partnerships, members of LLCs or stockholders in corporations. All such loans must be recorded in the company minutes and documented with loan agreements and real interest activity.
  • Many small business owners have been charging personal items to the company and are unaware that too many of these business deductions are, in fact, not business deductions. Included in this area are vehicles used for personal and business use (business may only deduct business use). The same rules apply for purchasing meals for your employees (personal meals are never deductible).
  •  All businesses should be preparing Form 1099’s for all individuals to whom the business has paid $600.00 or more in the calendar year. Small businesses should start collecting information now on people to whom you have paid at least $600 during the year. You will need to collect the name, address, and tax ID number (which can be social security number or an employer identification number for each of these individuals). Form W-9 should be used to collect that information.
  • The George W. Bush tax cuts are due to end soon. We will provide updates as soon as the decisions are made by our government.

 For more information, please contact a Schneider Downs Tax Advisor today.

© 2012 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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